Major Medical or traditional health insurance - typically the insured party chooses the hospital or health care provider. An agreement can be signed given allowing the insurance company to pay the health provider directly with the insured party covering 20% of the expense. Otherwise, the insured party pays the full amount and then summits the expenses to the insurance company to receive 80% reimbursement.
The out of pocket expenses may be a little higher with this plan, but the insured party has more control over treatment choices and locations.
HMO or Health Maintenance Organization - the costs for this plan are typically less than traditional health insurance policies. The HMO designates a Primary Care Physician. The HMO also will determine if procedures are medically necessary (and therefore covered) by the policy.
PPO or Preferred Provider Organization - this is a plan similar to the HMO. The main difference is that the insured party can see any physician of choice, but using one out of the network (doctors that have signed an agreement with the PPO to accept their payment allotments) will mean that the insured party will be responsible for the amount about the allotment that the physician charges.
The main difference between the different major plans in the insurance industry is choice. The more choice that the insured party desires the more it is likely to cost.
